Stabilising SriLankan Airlines :

Sale of aircraft to ease burden

By Isuri Yasasmin Kaviratne

The four A350-900 airbuses are being sold to stablise SriLankan Airlines to present it to prospective shareholders, partners in management and equity, Deputy Minister of State Enterprise Eran Wickremaratne said.

The Minister said the Request for Proposals (RFP) will commence soon and as a stepping stone, the government is looking at commercial means of reducing the debt burden of the national carrier.

One of the four airbuses has already been contracted out and discussions are underway with ‘a couple of airlines’ for the sale of the remaining three, Wickremaratne said.

The four airbuses belong to a purchasing order of eight, the rest of the airbuses will arrive later this year, after which the government intends to deal with them separately. The minister said no decision has yet been made regarding the sale of the aircraft that are due to arrive.

“The government is looking for a partner for the SriLankan Airlines for management and equity and this is part of the preparing process.”

The losses incurred by SriLankan Airlines in 2014 was approximately Rs. 32 billion with aircraft contracted above the market price, Wickremaratne explained with the directorial and managerial decisions made, the losses incurred during the 2015 financial year was reduced to Rs. 16 billion.

“We are heading in the right direction. The restructuring process is not pleasant, but it’s compulsory to enhance the value of the airline so that we will be in a better position when presenting the RFPs. This is a national asset that belongs to people, we want to maximise its value,” he explained.

He added that there are managerial decisions made to strengthen the airline and make it more profitable, such as discontinuing with the less profitable routes and focusing more on profitable routes.

“The SriLankan flies to Asia, Middle East and Europe, therefore, it can be called predominantly a regional airline. And it will continue to fly to Europe and the Middle East but the management will make a decision on less profitable routes,” the Minister said.